Follow the link to the fact sheet for the proposed 49th Ward Rental Improvement Fund, the TIF that will cover the entire 49th Ward, and divert up to $54 Million in property taxes paid in the ward to landlords in the area to rehabilitate their properties, on the condition that they reserve a percentage of their units for low-income tenants.
Many people believe that this plan is an "improved" TIF, but the closer I look at this plan, the more difficult I find it to believe that it will benefit anyone other than owners of rental properties who are to receive the grants.
The RIF (Rental Improvement Fund), a variation on a traditional TIF created to improve rental property, is being promoted by Marilyn Pagan-Banks of North Side P.O.W.E.R. and 49th Ward candidate for Alderman, Brian White. The RIF is projected to generate up to $54 Million over its 23-year lifespan, which is to assist (i.e. subsidize) more than 1,500 rental property owners in the ward in repairing and rehabilitating their properties on the condition that they keep their rentals affordable.
According to the promoters, we need the RIF to "improve the quality of life for all Rogers Park residents by preserving the unique diversity of Rogers Park as a community of choice", to "address the current situation- that much of the housing stock in Rogers Park is aged and could be improved with rehabilitation-while creating a future source of dedicated revenue for continued housing market stabilization and improvement"; and "Protect many of the smaller landlords who may be compelled to exist the rental market or raise rents to unaffordable levels, due to the costs to make repairs."
The RIF will exist "solely to fund multifamily rental property repair and rehabilitation", and funding would be available to landlords in the form of grants, in return for which the landlord would agree to keep rents affordable, as defined in the guidelines, for ten years.
Taxpayers should have a lot of questions to ask about a plan that will take an "increment" of local property taxes amounting to as much as $54 Million over the next 23 years to subsidize some property owners to improve their properties while maintain rents at reduced levels. For starters, the grants will be offset by additional property taxes to make up for taxes being diverted away from essential city services, which means that the rents in the area will trend higher and there will be no net gain for the renters on properties that benefit from these grants.
And does Rogers Park really need more cheap housing, in an era of falling house and condo prices, and downward pressure on rentals as failed condo conversions revert to rental?
Will this TIF overlap some of the areas covered by the Loyola-Devon TIF, which still has several years to run? What effect will being in two TIF districts have on the taxes for affected properties? Will it matter?
But the most important questions are these: What gives a public agency the right to to divert public money to private property owners, whether for the benefit of renters or anyone else? And how is "continuing housing stabilization" the function of a government?
Will the RIF do more to aggravate blight than mitigate it?
Worse, could it be that the RIF will make lower-income renters worse off, not better, and that they will end up paying more rent, not less? Will the RIF be just another factor in driving up property taxes, and rents, thus not only canceling the benefits to landlords and tenants, while increasing the load on all property owners?
Most of all, how will Chicago solve its financial problems and continue to provide essential civil services such as police and fire protection, public transportation, schools, as well as desirable amenities that make the city an attractive place to live and work, and still keep taxes at levels where Chicago can compete with other cities for businesses and residents, if we continue to divert hundreds of millions of dollars in the aggregate of all the city's 160-plus TIF districts, not to mention a multitude of other massive subsidies named differently, from city coffers to private purposes?
None of our candidates for the alderman in the 49th have addressed the city's mounting financial problems, which mirror those of the state of Illinois, now one of the most financially challenged states in the country. Much less do they seem concerned with how we will be able to fund essential services, and critical infrastructure repairs and improvements in the coming era of rising fuel prices and increasing shortages, and falling tax revenues due to the continued shrinkage of our tax base and the deteriorating incomes of the population.
Two public meetings concerning the RIF have been held so far, with only a day's notice given for each, resulting in low attendance for each. The first I attended, at which Tom Tresser spoke, had only a sprinkling of attendees. It would be beneficial and only appropriate to have another meeting for the public with more publicity and advance notice, and attended by our candidates for Alderman, Joe Moore and Brian White, especially since the latter is one of its promoters; as well as Marilyn Pagan-Banks, and the members of the ZULAC zoning committee. The public is entitled to a more solidly grounded justification for yet another massive diversion of public money for private purposes.
8 comments:
Hi Laura
As I noted in a comment to your earlier post about the aldermanic candidates, the TIF/RIF is currently bottled up in a task force by Alderman Moore. The task force is composed of community members, including the very members of the community that, as you note, should stand to benefit from the TIF. Curiously, they are not clamoring for the Alderman to get behind the TIF. That energy is coming from groups looking to preserve affordable housing. I think it is important to give the task force the space it needs to do its work and make recommendations to the Alderman. It is clear to me that the issues you raise are not lost on the task force and will likely be addressed.
It is ironic to me that the very group of people you identified as most likely to benefit are clearly not willing to wholeheartedly support the initiative. I know that folks in attendance at a previous meeting with the Alderman have documented what they believe was his unqualified expression of support for the measure. The fact that he has now kicked off a task force to study the issue has caused them much heartache. In this instance, the fact that everyone is currently uncomfortable may be a good thing.
Hi Laura:
Your post notes the proposed RIF could help as many as 1,500 property owners in Rogers Park over 23 years. That would be the majority of rental property owners in the community, which includes hundreds of larger rental buildings and many more small rental properties. Given the fact that Rogers Park continues to be majority rental by most estimates, the RIF is actually likely to benefit most people in the community.
Brian White
Candidate, 49th Ward Alderman
(for disclosure, I am the same Brian White who developed the RIF, though I am not involved in the RIF campaign at this time or due to obvious conflicts of interest).
Hi Brian,
As I pointed out, the "assistance" given landlords will be offset by the loss of tax revenues necessary to run the city and fund our essential services, which will necessitate more TAX HIKES.
What's the use of getting $10K per unit in repairs if my taxes double? The grant is a one-time thing, while the taxes go on, and up, forever.
As has been noted elsewhere, people in other TIF districts are seeing as much as 70% of their property taxes go to the TIF. The Wilson Yards TIF is claiming about that much of the taxes within its boundaries.
There is growing awareness among policy makers that TIFs are collapsing communities, instead of helping them. Curious that these programs, designed to combat blight, are making it worse, and rendering communities unable to pay for essential services and infrastructure. They transfer the risk of development from the entities they subsidize to the community at large.
Voters would really like to hear how you and other candidates intend to cope with Chicago's towering financial problems, and fund our services and infrastructure without more property tax hikes. And financially strapped homeowners really, really want to continue to live in the houses they struggled their whole lives to pay for and not be blown out by property taxes.
I am starting to believe that the TIF iniative has only muddied the waters. Perhaps thecity should expect a little less TIF repayment in the short run?
Brian,
What happens when landlord finds out they need to pay for much more in repairs on the property will they get more money? What if thousands of dollars go into a building and then later its found it cannot be repaired or has a structural problem. How is fixing a landlords property going to improve the quality of life the renter? They might see some minor improvements in the draftiness of the apartment but the actual cost to revamp an entire apartment building to be energy efficient is costly, and how is fixing the property owners property going to help the renter? Sorry to burst your bubble but many renters could care less about the exterior shape of the apartment building. Frankly Rogers Park has very affordable rent as it is based on other parts of the City. If people cant afford to the live in the City I am afraid perhaps they can move to another area? Who is going to regulate the landlords spending and business practices? Why didn't they fix their own buildings when times were good, BECAUSE THEY ARE GREEDY SLUMLORDS? Why didn't landlords put a little money away for their own rainy day fund? Many landlords don't even pay benefits for their own employees, pay taxes and even higher illegal immigrants (WHICH SHOULD BE STOPPED FIRST). Another problem with the concept of low income housing, which by the way I spent much of my child hood and teenage years since my mother was on Welfare in doesn't do ANYTHING to help the renter in terms of making them move forward in life. This may sound like a noble cause but the the reality is Chicagoans cant afford to make neighborhoods that breed crime and poverty just for the idea that this is right thing to do. In fact I argue that this is not even the ethical thing to do since if people cant afford to live in the City how would they be able to afford other things to make their life better, like education? Another problem that has been skimmed over OK great we have "affordable housing" what about food costs, transportation, etc? To me home ownership should be encouraged vs. a free for all on renting. Senior Citizens, students, and people that need temporary housing really should be the only renters. We shouldn't encourage this and definitely should not subsidize it through taxes. To me this sounds like we want to write of the 49th Ward as having the slim possibility of being an economic enclave and thats a little unnerving. Are we discouraging home owners in this Ward to create a low income housing district on the North Side??? Perhaps all of the hidden unknowns and possible agendas appear to risky but to me TIF and RIF are not right for the long term goals of Chicago. By the way I am a Democrat but this is pushing me away.
Brian,
What happens when landlord finds out they need to pay for much more in repairs on the property will they get more money? What if thousands of dollars go into a building and then later its found it cannot be repaired or has a structural problem. How is fixing a landlords property going to improve the quality of life the renter? They might see some minor improvements in the draftiness of the apartment but the actual cost to revamp an entire apartment building to be energy efficient is costly, and how is fixing the property owners property going to help the renter? Sorry to burst your bubble but many renters could care less about the exterior shape of the apartment building. Frankly Rogers Park has very affordable rent as it is based on other parts of the City. If people cant afford to the live in the City I am afraid perhaps they can move to another area? Who is going to regulate the landlords spending and business practices? Why didn't they fix their own buildings when times were good, BECAUSE THEY ARE GREEDY SLUMLORDS? Why didn't landlords put a little money away for their own rainy day fund? Many landlords don't even pay benefits for their own employees, pay taxes and even higher illegal immigrants (WHICH SHOULD BE STOPPED FIRST). Another problem with the concept of low income housing, which by the way I spent much of my child hood and teenage years since my mother was on Welfare in doesn't do ANYTHING to help the renter in terms of making them move forward in life. This may sound like a noble cause but the the reality is Chicagoans cant afford to make neighborhoods that breed crime and poverty just for the idea that this is right thing to do. In fact I argue that this is not even the ethical thing to do since if people cant afford to live in the City how would they be able to afford other things to make their life better, like education? Another problem that has been skimmed over OK great we have "affordable housing" what about food costs, transportation, etc? To me home ownership should be encouraged vs. a free for all on renting. Senior Citizens, students, and people that need temporary housing really should be the only renters. We shouldn't encourage this and definitely should not subsidize it through taxes. To me this sounds like we want to write of the 49th Ward as having the slim possibility of being an economic enclave and thats a little unnerving. Are we discouraging home owners in this Ward to create a low income housing district on the North Side??? Perhaps all of the hidden unknowns and possible agendas appear to risky but to me TIF and RIF are not right for the long term goals of Chicago. By the way I am a Democrat but this is pushing me away.
Brian,
What happens when landlord finds out they need to pay for much more in repairs on the property will they get more money? What if thousands of dollars go into a building and then later its found it cannot be repaired or has a structural problem. How is fixing a landlords property going to improve the quality of life the renter? They might see some minor improvements in the draftiness of the apartment but the actual cost to revamp an entire apartment building to be energy efficient is costly, and how is fixing the property owners property going to help the renter? Sorry to burst your bubble but many renters could care less about the exterior shape of the apartment building. Frankly Rogers Park has very affordable rent as it is based on other parts of the City. If people cant afford to the live in the City I am afraid perhaps they can move to another area? Who is going to regulate the landlords spending and business practices? Why didn't they fix their own buildings when times were good, BECAUSE THEY ARE GREEDY SLUMLORDS? Why didn't landlords put a little money away for their own rainy day fund? Many landlords don't even pay benefits for their own employees, pay taxes and even higher illegal immigrants (WHICH SHOULD BE STOPPED FIRST).
I grew up in "affordable housing" and it breeds poverty. Affordable Home ownership, creating jobs, substance abuse treatment and drug eradication, illegal immigration, gang eradication, and access to affordable loans should be on the top of your list to improve the long term quality of life in this ward.
I'll put in here again.
I am a market-rate renter, neither poor nor affluent, and I fail to see how I've been helped by either "affordable" rents, or by programs that subsidize "affordable" home ownership.
Quite the contrary. Programs designed to promote and subsidize home ownership only succeeded in creating the biggest housing and DEBT bubble the world has ever seen and that is unwinding with incredible ferocity and doing great damage to the non-wealthy population, which is everybody in Rogers Park, for I don't believe we have anybody living in this nabe who has a net worth of $50 Million or more.
Rental subsidies have the same effect. They drive up rents for market rate renters, which includes most of the working poor, who are now priced out of most of the Chicago area while we spend as much as $400K per unit building subsidized rentals, like those at Wilson Yards, and they drive up property taxes, making life very expensive and difficult for moderate and middle income home owners, who are often forced to sell the homes they struggled to buy for decades, because they can no longer pay the escalating taxes.
We don't "need" home ownership any more than we "need" more low income housing stock.
We can see the failure of government-subsidized rentals and subsidized home ownership alike all around us everywhere in this country. Somehow, the expansion of rental subsidies has resulted in more homeless people than ever, and in rents that have increased over 50% in the past decade while incomes have stagnated for everyone except those in the highest income brackets, like about $1 Million a year or more. And subsidized home ownership has helped create the most complete financial disaster in the history of civilization. It has done nothing but drive house price inflation, and debt creation among the classes of people who most need to avoid assuming heavy debt loads.
We have had way enough policy meddling in the housing market. I want to buy this year, with confidence that my housing expense will remain stable, which is the main reason to buy to begin with. Get our governments out of the housing market altogether and let people work within their means to buy or rent what they can afford.
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